Amendment in Section 80A

Amendment in Section 80A

Existing provision

As per the existing provisions, the transactions (sale of goods or provision of services) between the eligible undertaking and other undertakings of the assessee should be carried out at market value. The market value in relation to any goods or services was defined to mean the price that such goods or services would ordinarily fetch in the open market.

Amendment

For the purposes of this sub-section, "market value", in relation to any goods or services, has now been proposed to mean: -

For the purposes of this sub-section, "market value", in relation to any goods or services, has now been proposed to mean: -

♦ the price that such goods or services would ordinarily fetch in the open market; or

♦ the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or provision of services is a specified domestic transaction referred to in newly proposed section 92BA

Analysis/conclusion

With effect from assessment year commencing 1 April 2013, a new section 92BA has been inserted which defines "specified domestic transaction".

This section has been inserted to ensure that where an eligible undertaking enters into any "specified transaction" with any other undertaking, then for the purpose of availing benefit under section 80A, the transaction recorded in the books of accounts should correspond to the market value of such goods or services.

In this regard, the market value of such goods and services in relation to such "specified domestic transaction" shall be computed as discussed above.

This amendment will take effect from 1st April 2013 and will, accordingly, apply in relation to the Assessment Year 2013-14 and subsequent assessment years.

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